Midcap IT services firm Coforge has announced the acquisition of Silicon Valley-based artificial intelligence company Encora for $2.35 billion in an all stock transaction, marking the largest takeover by an Indian IT company in the engineering research and development (ER&D) segment.
The deal is the fourth-largest ER&D acquisition globally and the second-largest acquisition ever by an Indian IT services firm, significantly strengthening Coforge’s artificial intelligence, data and cloud engineering capabilities while expanding its global delivery footprint.
Coforge will acquire Encora from private equity investors Advent, Warburg Pincus, and other minority shareholders. The transaction values Encora’s equity at $1.89 billion, which will be funded through a preferential allotment of Coforge shares priced at ₹1,815.91 per share, representing a 14.5 per cent premium to the company’s previous closing price.
Post-transaction, Encora’s shareholders will hold a 20 per cent stake in the combined entity and will have the right to appoint two nominee directors to Coforge’s board, along with representation on key board committees. The acquisition is expected to be earnings-per-share accretive in FY27, with the merged company operating at an Ebit margin of around 14 per cent.
Encora, which specialises in AI-driven product engineering supported by cloud and data platforms, is projected to generate $600 million in revenue in FY26, with an adjusted Ebitda margin of approximately 19 per cent. The transaction is subject to customary regulatory and closing approvals.
Calling the acquisition a transformational milestone, Sudhir Singh, CEO and Executive Director of Coforge, said the deal creates a scaled AI-led engineering platform designed to help enterprises operationalise artificial intelligence. He added that the combined firm would build enterprise data cores and cloud foundations purpose-built for AI adoption.
“The new $2.5 billion firm, with a $2 billion enterprise core of AI-led engineering, data and cloud services, will set the benchmark for making the promise of AI real for enterprises,” Singh said, adding that the company expects accelerated growth following the integration.
Coforge estimates that AI-led engineering, data and cloud services will generate nearly $2 billion in revenue by FY27, including $1.25 billion from AI-driven product engineering, $500 million from cloud services, and $250 million from data engineering. Its hi-tech and healthcare verticals are also expected to scale rapidly, each reaching an annualised revenue run rate of about $170 million.
For context, Coforge reported FY25 revenue of approximately $1.4 billion.
Industry experts see the deal as strategically sound. Pareekh Jain, founder of technology advisory firm EIIR Trend, said Coforge has consistently executed successful inorganic expansions. “This acquisition allows Coforge to enter new segments and unlock meaningful cross-sell opportunities,” he noted.
The transaction will significantly strengthen Coforge’s nearshore delivery presence in Latin America and expand its footprint across the western and midwestern United States, regions that earlier accounted for only a quarter of its US revenues. The combined group will have 45 scalable client relationships, each generating over $10 million annually, supported by more than 3,100 AI and engineering specialists.
Coforge has been on an aggressive acquisition spree to build scale and AI depth. In 2025 alone, it has acquired three companies, following the Cigniti acquisition in 2024, as part of its ambition to build a $2 billion-plus global technology services company.
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